Two companies targeting Spanish-speaking consumers with claims that they could improve consumers’ credit ratings have allegedly violated federal laws, according to the Federal Trade Commission. The FTC has asked a federal district court to halt both companies’ illegal business practices and award consumer redress.

The FTC alleges that Florida-based Sunshine Credit Repair Inc. and Service Brokers Associates Inc. have violated the Credit Repair Organizations Act (CROA) by: (1) charging consumers money before performing promised services; (2) failing to provide consumers with written statements concerning their credit file rights; and (3) failing to inform consumers of their right to cancel a contract. The FTC further alleges that Sunshine Credit violated the CROA and the FTC Act by making deceptive claims about the company’s ability to remove accurate, negative information from consumers’ credit reports.

According to separate FTC complaints, Sunshine Credit and Service Brokers use Spanish- and English-language advertising to induce consumers to pay up-front fees for the defendants’ "credit repair" services. The FTC alleges that Sunshine Credit typically charges a $198 fee for its services, while Service Brokers typically charges $300 to $400. Under the Credit Repair Organizations Act (CROA), it is illegal to charge consumers money before performing the promised credit repair services.

"When it comes to credit repair, only time, a conscientious effort, and a personal debt repayment plan will improve your credit report," said Brad Elbein, director of the FTC’s Southwest Regional Office. "No credit repair company or consumer has the right to remove accurate, current information from a credit report."

According to the complaints, prior to their signing of a contract, both companies allegedly failed to provide consumers with required statements informing them about their rights under federal and state law to dispute inaccurate information themselves and explaining the limitations of credit repair. In addition, the FTC alleged that both companies fail to inform consumers they have the right to cancel their contracts without penalty.

According to the FTC, consumers can remove inaccurate information from a credit report themselves – credit repair companies have no greater power to do so. If consumers notice errors on their credit reports, they should contact the credit bureau to dispute that information. The credit bureau will then conduct an investigation and, if the entry on the report is found to be inaccurate, it will be removed. The FTC offers advice for consumers looking to go through this process, as well as indicators that a "credit repair" offer may be a scam.

The FTC’s complaint against Sunshine Credit names Sunshine Credit Repair Inc., and Gabriela Etchevarne as defendants. The complaint against Service Brokers names Service Brokers Associates Inc. and Daniel Gonzalez as defendants.

The complaints were filed in the U.S. District Court for the Southern District of Florida on Jan. 26, 2005.


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